A life settlement is the sale of an existing life insurance policy to a licensed life settlement buyer for more than its cash surrender value, but less than its death benefit.
At Abacus, our goal is to become your trusted source for information about life settlements. By providing you with up-to-date knowledge, we hope to help you understand exactly what a life settlement is. We are committed to empowering policy owners with objective insight to help them make an informed decision regarding their insurance policy.
In terms of definition, a life settlement is a financial transaction where the owner of an unwanted life insurance policy transfers ownership and beneficiary rights to an institutional investment fund. In exchange for transferring ownership, the insured receives a cash settlement that can often be four times greater than the cash surrender value. A life settlement is not a loan, it is a one-time cash transaction that results in a full transfer of ownership in exchange for a lump sum. The money belongs entirely to the policy seller and can be spent at his or her discretion. Life Settlements can also be in the form of a paid-up death benefit.